“What should I do if I can’t afford user acquisition?”

Posted on October 12, 2015 by Eric Benjamin Seufert

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That mobile marketing costs are rising is a well-worn source of anguish for app developers — especially smaller developers launching their first apps. There are two ways to interpret the dogged march upwards of the average price of mobile installs via direct-response mobile advertisements:

1. It’s a good thing; surely the capable marketing teams at the largest app developers are spending their money wisely, and thus the increase in user acquisition costs must reflect an increase in general monetization within the mobile economy. In other words, mobile marketing costs are rising because app users are valuable; app developers are able to make lots of money if they can create engaging products with robust freemium economies.

2. It’s a bad thing; mobile users are concentrating their time in only a handful of mobile apps, and those apps are benefiting disproportionately from the growth of the mobile economy. Successful app developers are able to spend lavishly on mobile marketing, creating a vicious cycle that prevents developers from entering the marketplace. Most doomsday articles about mobile marketing take this view.

Both of these viewpoints are valid (although the second is far less constructive, with respect to influencing strategy, than the first), and both beg a pertinent question from app developers: What should a developer do if they can’t afford user acquisition?

The obvious response to the question is that they shouldn’t run direct response mobile advertising campaigns; if a developer can’t achieve scale from user acquisition initiatives, or if those campaigns can only be run at scale with negative ROI (eg. “Spending $1 to make $0.20“), then user acquisition isn’t a viable, long-term, structural growth strategy for that developer.

In this presentation, I proposed a framework for thinking about app marketing from the perspective of product design; that is, designing an app to match the developer’s capacity for marketing it. The upper-right quadrant of this scheme represents a no-man’s land of app economy success: developers with no money to undertake user acquisition making the types of apps that can only be grown via paid user acquisition.

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So what should an app developer do if they can’t afford to run user acquisition campaigns? They should make the kind of apps that might possibly achieve traction absent user acquisition campaigns. This is a design decision that invites a marketing strategy, and not the other way around: the app’s design defines the type of marketing the company can run for it once it is developed. In the same way that design decisions impact the ultimate performance of paid acquisition campaigns for mobile apps, design decisions impact the ultimate organic growth of apps that can’t be marketed via paid user acquisition.